Yahoo's earnings above consensus, but still shaky

After giving Carol Bartz the boot, Yahoo flatlined this quarter

The world hasn’t been so nice to Yahoo lately. Last December, the company cut some 600 employees, marking its fourth mass culling in only three years. And then just last month, Yahoo gave CEO Carol Bartz the unceremonious boot. So where is it financially these days? Still not doing so hot, but things may be looking up soon.

Yahoo released its third quarter earnings report Tuesday after closing and GAAP revenue was down 24% to $1.2 billion from $1.6 billion this time last year. In revenue excluding traffic acquisition costs (ex-TAC), Yahoo was down 5% to $1.07 billion, compared to $1.12 billion last year.

While this was above consensus estimates, Citi Investment analyst Mark Mahaney expected a little more from Yahoo—$1.08 billion in revenue ex-TAC.

But Yahoo also notes that the decreases were due primarily to the revenue share that’s part of the search agreement with Microsoft.

Income from operations was higher than expected, however, reaching $177 million while consensus estimates pegged Yahoo’s operating income at $155 million.

In more good news, display revenue (ex-TAC) was up ever-so-slightly to $449 million over $448 million this time last year. But search revenue tanked, dropping 13% to $374 million from $428 million.

"We're pleased that revenue, operating income and EPS were all above consensus this quarter," said Tim Morse, Yahoo’s CFO and Interim CEO, in a statement. "My focus, and that of the whole company, is to move the business forward with new technology, partnerships, products, and premium personalized content — all with an eye toward growing monetization."

Its efforts to monetize include beefing up its content offerings with a new strategic alliance with ABC News, which kicked off with the launch of GoodMorningAmerica.com on Yahoo and a live stream of George Stephanopoulos interviewing President Obama at the White House.

Yahoo also launched 28 new sites on the Yahoo Publishing Platform, bringing the total to 95.

Additionally, Yahoo turned to Facebook for a little help with the launch of IntoNow, which lets users see what their friends are reading and watching online.

Sadly, it’s too early to know what kind of effect Carol Bartz’s departure has had on Yahoo, since she was fired in early September and today’s earnings report only includes earnings up to September 30. If anything, it looks like Yahoo had somewhat flatlined this quarter when it gave Bartz the boot. Will it be able to pick itself up next quarter?